MoneyGram International Inc.

In our leverage calculation, we include the holdco senior notes and preferred equity as part of MGI's total debt. Excluding the $300 million of preferred equity from total debt, we expect the leverage to be around 6x-7x. The stable outlook over the next 12 months indicates our expectation for EBITDA cash interest coverage of 2.0x-3.0x, debt to EBITDA above 5.0x, and no new compliance deficiencies. Our outlook also considers MGI's existing market position in global money transfer services, its financial sponsor ownership, adequate liquidity, and sufficient covenant cushion. We could lower the ratings over the next 12 months if we expect EBITDA cash interest coverage to decrease below 2.0x on a sustained basis, liquidity deteriorates, or there are further compliance

...We expect MoneyGram International Inc. (MGI) to operate with leverage of 8x-9x and cash interest coverage of 2x-3x in the next 12 months. Following its acquisition by private equity firm Madison Dearborn Partners (MDP), MGI is now controlled by a financial sponsor, which contributes to our leverage expectations. In our leverage calculation, we include the holdco senior notes and preferred equity as part of MGI's total debt. Excluding the $300 million of preferred equity from total debt, we expect the leverage to be around 6x-7x. We think MGI's business position has improved in recent years because of its scaled up digital channel and enhanced compliance infrastructure. As of March 2023, MGI's digital channel accounted for 50% of its money transfer transactions, compared with 26% in 2020. The company also significantly invested in its compliance infrastructure over the last decade, leading to the exit of the Deferred Prosecution Agreement with the Department of Justice in June 2021. MGI...

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